ANALYSIS - The UK hosted the 2012 Olympic Games and Brazil will host the next one in 2016, but their poultry meat markets are about as different as they could be. Jackie Linden reports from a recent meeting where those differences were outlined and explained.
Similarities and differences in the poultry meat markets in Brazil and the UK were explored during a recent roundtable in Cambridge. The meeting was held under the auspices of a working group of the World’s Poultry Science Association (WPSA) and organised by Peter van Horne of Wageningen University in the Netherlands and Jason Gittens of ADAS in the UK.
Understanding the success of Brazilian poultry meat sector
Outlining the reasons for the successful development of the poultry meat sector in Brazil, Dr Dirceu Talamini of research institute, Embrapa, started with the country’s geographical advantages: it is the fifth largest country in the world by land area.
It covers 851 million hectares, of which 41 per cent is Amazon forest, 26 per cent is pasture and seven per cent is under annual crops. While large areas are protected because they are environmentally sensitive and/or assigned to indigenous people, there remains a vast area available for cultivation; it has a generally favourable climate and Brazil can boast 12 per cent of the world’s fresh water.
Inputs for poultry production are plentiful, high in quality and comparatively low-cost, he added.
The sector is fully integrated and that helps to make the whole supply chain connected and coordinated. Brazil-based companies, JBS SA and BRF, are among the top three poultry companies in the world. Combining the country’s natural resources with the best available technology and with government support, Brazilian poultry meat companies have developed a good reputation for producing high-quality products at competitive prices.
All these positive factors have brought about impressive increases in production, such that poultry meat output was more than 13 million tonnes in 2014, an increase of 439 per cent since 1990.
As well as achieving the world’s top slot in terms of chicken meat exports (and a wide range of other agricultural products), Brazil’s average consumption of poultry meat stands at 45.7kg. The figure was close to zero in the 1970s having overtaken the country’s traditional favourite, beef, in 2000. Growth rates for output, exports and domestic consumption of poultry are far higher than for beef or pork.
Parana state has overtaken Santa Catarina as the top poultry-producing area, while the Central West region is catching up with a 15 per cent share of the total.
Dr Talamini showed that the living standards of the people in the areas of poultry and pig farming tend to be higher than the national average. Infrastructure is holding back expansion and exports in some areas and more government support is required to build ports and the road and rail networks needed to connect with the expanding livestock-producing centres.
Newly constructed poultry farms are fully equipped with automatic environmental controls, watering and feeding systems, sometimes with up to 50 houses spread across a single large site.
These developments, together with those in genetics and feeding, have contributed to significant improvements in average production efficiency, so that today, Brazil can produce a 2.6-kg broiler at 40 days of age with an FCR of around 1.7.
These performance figures and the efficiencies in the supply chain have helped to make Brazil one of the lowest-cost poultry meat producers in the world, said Dr Talamini. He sounded one note of warning, however. Recent government policies to raise wage levels and control electricity prices threaten to push Brazilian poultry companies off the top of the world rankings in terms of low-cost chicken production.
UK poultry meat industry faces up to challenges
Avian influenza (AI) outbreaks, Campylobacter contamination and high welfare standards are the three main challenges facing the poultry meat sector in the United Kingdom, according to Andrew Large, Chief Executive Officer of the British Poultry Council (BPC).
There have been three unrelated outbreaks of AI in commercial poultry flocks over the last year, none of which spread to any other units, thankfully, owing to good biosecurity but they are still estimated to have cost around UK£50 million in terms of lost production and exports.
With the now ever-present threat of AI in Europe, the European Commission (EC) has confirmed that the “12-week rule” will be maintained, meaning that freedom from AI cannot be declared until at least that period has elapsed after the last outbreak has been stamped out. According to Mr Large, the EC is also considering a ban on poultry farms near open water that is visited by migratory birds.
Campylobacter remains a very significant issue for the poultry industry, he said. It causes 280,000 cases of illness per year and despite the best efforts to control the bacterium, the most recent survey revealed it to be present on 70 per cent of retail chickens.
One glimmer of hope was that the proportion of carcasses with the highest level of contamination appears to be in decline. The whole supply chain is committed to reducing Campylobacter, Mr Large confirmed, adding that cook-in-the-bag products, consumer advice, sterilising transport crates and better biosecurity at thinning are all helping to gain control over the situation.
Welfare standards are constantly under pressure, mainly in the media although they do not appear to impact consumer choices greatly. Red Tractor is the widely used assurance scheme covering general husbandry standards. With other in the sector, the BPC goes to great efforts to explain to the public that in breeding programmes, chickens are selected based on a range of traits and not only those relating to productivity.
On antibiotic use, the BPC supports the policy of the Responsible Use of Medicines in Agriculture (RUMA) alliance: “as little as possible and as much as necessary”. With the country’s Chief Medical Officer stating that livestock are more responsible for growing antibiotic resistance than the science appears to support, Mr Large foresees this will remain a contentious issue.
British producers and processors supply 47 per cent of the poultry meat consumed in the UK, 92 per cent of which is chicken, three per cent turkey meat, two per cent duck meat and 0.1 per cent goose meat. Sales last year were valued at UK£6.9 billion from around 2,500 farms and the industry employs more than 79,000 people. An annual increase of around three per cent in output has been consistently achieved.
The UK market is essentially one for breast meat so white meat is imported from other EU countries and Brazil, while dark meat and other parts are exported. The dominance of the retailers in the domestic market has meant that poultry meat is effectively a commodity, with little other branding.
The market is dominated by standard birds costing around £4 per bird; free-range birds, at twice the price, account for a further 4.5 per cent of sales and organic birds costing about £16 make up just 0.5 per cent of the market.
Demand for the latter two categories dropped during the economic crisis in 2008 and it has shown no real sign of recovering, added Mr Large.
Read Jackie's first report from the meeting: